In sharing with you this #MomentswithSue video that was filmed on the IP Thought Leaders study tour to San Francisco in September; I am introducing you to one of my favourite guests, Rich Arnold. Rich shared his experiences with what Fintech companies are doing, and the impact this will have on the financial services sector.
Watch the video for yourself and listen to why he thinks tech companies are turning into mercenaries.
Some of the observations that Rich shared were challenging indeed…. When he started with a bold statement that “the world is fundamentally different to what you think it is” I had a moment.
“There is a cluster of 800+ financial services guys in Silicon Valley and they’re out to eat your lunch – I sit with guys who do nothing all day long but think about and find industries they can disrupt and there is no shortage of money from people prepared to back them because they know there are billions available in disruption… Global domination comes first and then we’ll figure out how to monetize it later.” said Rich.
“Software disruption is real”; throughout his presentation Rich listed some of the other industries that have been disrupted.
- Better mousetraps built by iOS and Android ripped $75 BILLION of revenue from the mobile phone players that once had market share (Nokia, Motorola).
- In the category of a completely new solution invented to supply a market demand, Airbnb ripped $10 BILLION from the major hotel chains, and they don’t even own a building.
- Google and Facebook have disrupted $50 BILLION of revenue from traditional broadcast and print media players – and we’re talking big brands who were rendered powerless to new players who were satisfying needs their customers didn’t even know they had yet.
The implications of this are many and very serious indeed. The disruption that Rich had created was tangible but when he said “Find a way to service thousands of clients at say $25 a month”, my reaction was “oh he doesn’t understand the nature of a financial advice relationship and how clients value advice”.
But I was missing the point. Thankfully only for a nanosecond, but that point almost sailed past me in a flurry of arrogance and self-preservation instinct.
As it happens, not long after speaking to our intimate group at our San Francisco round table discussion, Rich spoke at an Australian Dealer Group Conference.
I couldn’t believe it when I heard that he wasn’t their favourite speaker until I understood why. It sounds as though the conference organisers were too good at achieving their goal of shocking advisers into the need to innovate, and the other speakers with the inspiring, practical solutions on how to innovate came a little too far behind on day two.
When faced with an uncomfortable truth, we can get defensive and dismiss the information as inaccurate, or react in a more negative way and allow fear to give way to helplessness, to give up all hope of being able to survive the disruption. It’s not surprising that the emotional reaction to a very real and imminent threat to ones own professional existence can render us irrational and temporarily deaf to new ideas.
We see this often when we’re coaching our clients. Sometimes the honest reflections on the reality of a business bring emotional reactions. Our role becomes part therapist and part motivator, and I can honestly say that a lot of the success we help businesses achieve comes about because of our ability to remain impartial, and to help business owners work through the emotion and start seeing more clearly, to arrive at practical strategies, to start making decisions and taking action.
So getting back to Rich, what was that point that I missed for half a moment?
Our instinct says that a robot will never replace an adviser, and I believe this to be true. But rather than have to charge high fees because you have manual processes in order to be compliant, ask yourself – is there anything, ANYTHING you do that can be done by tech? Change the can to can’t and you’ll have a smaller list.
The only reason advisers should be scared of technology is if they’re not using it well in their business. People are now expecting more for their dollar – we know that prices are being squeezed. How, as a small business owner, do you reduce your overhead cost and price your work on the value of what clients are receiving? Rather than replacing you, I believe the rise in technology is increasing the value of what you do; provided you can utilise technology yourself and understand where your true value lies.
Your place is arguably the connector between tech and humans – financial services is in the business of trust and you bring a human face to generate trust for people to engage. As Rich so aptly said, “consumers are thinking that they need you to be their portal.”
Information is free, software is cheap and available, I believe clients value an adviser who can interpret that information and provide moral support for clients to make effective decisions and manage their behaviours around money. But to gain that trusted position takes time….or does it? I’ll talk in another article about how you can better leverage yourself.
Consider this, are you using your current software system to its full potential? If not, why not? Either learn how to use it properly, get a champion in your office or for goodness sake, ditch the old faithful and seek a better solution that actually achieves what you need it to.
Automate your marketing and customer relationship communications – we’re talking event triggered, in-app push messaging, SMS text. The technology exists so use your systems to know your clients well enough that you can communicate en masse in a way that your client feels is personalised communication.
Rich said that you need the margin to be at the retail end of the chain – you are the key component to the value chain. Your job when providing advice is not to sell a product itself, but provide valuable advice to ensure that whatever product suite is selected will do the job at the most cost effective price
A few other tips from Rich:
- Social media connectivity is important and automate it wherever possible.
- Don’t answer an email with an email – turn your camera on and talk to me by video – really connect! Then keep those videos and put them together to patch together later into a blog post.
- People I know share info with me – if you think there’s information I need to know, send it to me… then I know you’re connected with information I should know about.
I reflected that there is now a somewhat old fashioned view that you shouldn’t send your clients investment information or newsletters, they’re paying you so that you do all that for them…The new view says that information is power and it’s free, so show me that you have your finger on the pulse and that I need you to access the right information for me.
Suffice to say that my experience with Rich Arnold showed me a new perspective and yes it challenged my thinking. There is more to come from Rich in a second #MomentswithSue that will continue to showcase innovative thinking.
If you’re feeling overwhelmed about where to start, you are not in this alone. Reach out and ask for help, we know a lot about the options you have to play with.
Sue Viskovic CFP is the Founder of the national consulting business Elixir Consulting; a proud mother of four; a sought-after speaker; a business coach; and author of a number of books and programs designed for advisers. Sue is also the proud recipient of the 2015 Mentor of the Year Award.
With over 15 years’ experience in financial services, with roles spanning banking, funds management, advice and licensee services, Sue has built her career and her business on helping financial advisers, accountants and risk specialists to improve the way that they run their businesses and deliver advice.
This article was first published on LinkedIn Pulse on November 2nd, 2016.